Taking the Leadership Reins

Tom Haraldsen

November 1, 2012

Let’s face it—when you create a concept, work to perfect it, finalize the rules to govern it and invite others to join in building it, it’s never easy to stop running the show, never fun to no longer be in charge. Yet businesses and corporations have known for decades that sometimes the best way for a business to grow is to let someone other than the founder become its leader.

The challenge for a new chief executive officer taking over is meshing the best of the old world with a forward-looking view of the new one. Long-time employees might resent the changes, question the new CEO’s abilities or desires and feel they can’t be loyal to both the new CEO and the founder, who may have invited them to join the company. The new CEO brings his or her own leadership style and perspective of how a company needs to be run. Even with good ideas, that leader must find a way to make necessary changes without abandoning or destroying the ideas that have been working.

Making the Change
Taking the leadership reins is perhaps the stiffest challenge a new executive will be vested with. So, how can they do it?

“A lot of it is circumstantial and it depends on the type of organization,” says Robert Gross, a former CEO turned management consultant of many years as president of Robert C. Gross Associates. “The company could be private or public, large or small, for-profit or non-profit, and yet many of the methodologies for making such changes are the same.”

Gross lived in that world. He took the leadership reins at First Interstate Bank in Utah more than a decade ago. He was asked by former Gov. Mike Leavitt to serve as founding executive director at the Department of Workforce Services, consolidating six different agencies of state government. At the same time, he had to deal with the legislative priorities that had created them. It was a daunting task.

“The first thing I did was to find out as much as I could about each of those agencies,” he says. “Due diligence is key—on financial circumstances, determining the principal economic driver, learning about cash flow. In a regular business setting, that also means understanding the cap table—learning who owns what in a startup business, trying to understand how those pieces fit together. Corporate governance centers around the power in the board room and the C-suites.”

Communicate and Communicate Again
Gross recommends a new leader spend as much time as he or she can talking to everyone who reports directly to them—some who are the strategic thinkers and others who might be the movers.

“Kick the tires, look things over, talk to employees and reassure them. You need to listen more than you talk, and learn as much as you can,” he says.

That was certainly the strategy Jill Layfield employed last year when she was named CEO of Backcountry.com, the Park City-based leader in online merchandising of clothing, outdoor gear and recreational products. Layfield, who has been with the company since 2004, became the company’s leader when founder Jim Holland assumed the role of executive chairman.

“Because I’ve always been very transparent with my opinions, I involved the management team immediately in discussing what was and wasn’t working,” she says. “Fortunately for me, the team was great and the organizational structure was working. I spent an exorbitant amount of time with one-on-one communications. I wanted to know how any changes were going to affect our employees and our company to be sure they were on board before we made a change. I asked if they felt I was missing anything. If people feel involved and have a voice, you’re going to relieve a lot of their anxiety.”

Layfield identified a few areas where she thought change was necessary. “I didn’t want to disrupt things too much, and it wasn’t a case of individuals who needed to go—more of who we needed to add to the team. I wanted to preserve our culture because that is so important for us. I knew that to transition to a much larger company, people needed to fit that culture, and we needed to bring in an operating system that fit it.”

Eric Morgan recently finished his first year as CEO for AtTask, which produces on-demand project management software for thousands of companies in more than 65 countries. He was named to the position after founder Scott Johnson stepped into the role of chairman. Morgan was recruited to take Johnson’s place, and, like Gross, he says transitions of this sort do depend on situations.

“If you’re coming into a problem that requires a corporate turnaround, you’ll have one approach,” he says. “In this case, the company was doing well and growing, but it was time to take it to the next level.”